In 1996 lock products company Rav-Bariach was split into three divisions based on areas of specialization in order to allow them to focus on the process of developing and marketing each product group: the Doors Division, which focused on the local market, The Vehicle Locking Products Division, which aimed at the worldwide vehicle market, and the Locking Products Division, which manufactured locks and cylinders and marketed them to a range of consumers in Israel and abroad.
Holdings company Assa Abloy, which was founded in 1994 and is under Swedish-Finnish ownership, is now the world's leading international firm in the fields of locking solutions. It owns numerous lock companies around the world. In 2000 the firm acquired control of the Locking Products Division, which severed from Rav Bariach, forming a company called Mul-T-Lock. In 2003, once the transfer of control was complete, the international company bought company shares from the public and Mul-T-Lock became a private corporation. Today it has 680 employees, including 225 employed at nine sales companies around the world.
We spoke with Yael Shenhav, vice president of human resources, about operations and employee management at the company.
What characterizes your cooperation with Assa Abloy, the owners?
Yael Shenhav: Assa Abloy is not a managing company, so Mul-T-Lock is not a branch of it, but a subsidiary company. The board of director's involvement in the day-to-day management of Mul-T-Lock focuses on managing the reporting, oversight and control systems, conveying strategic principles and promoting information exchange and cooperation among the group's companies. As it grows Mul-T-Lock is developing new markets around the world. Today 75% of production is directed toward export and the company is posting growth annually. These achievements are held in high regard by the firm and allow us to maintain our independence, especially in light of the consolidation the group has been executing in recent years.
Though it could be said Mul-T-Lock is a commercial company operating in the metal industry, the company is perceived as a sophisticated industrial enterprise.
The company operates in traditional industry, but it's also positioned as a technology-rich company that belongs to an international concern and uses advanced and enlightened management methods. All these factors set it apart from the traditional metal industry. This comes across in many spheres, including patterns of employee management.
We attach great significance to human capital and our investment in it is a fundamental part of the organization's culture. The company has deeply-rooted history and a long record of success, combining to give the employees a sense of belonging and pride.
It's important to us to treat workers with respect and trust. We want every worker at every job to have interesting and varied work. This also encourages them to try harder in their jobs and in the long term preserves employment stability at the company. An example of this treatment is the equality in universal benefits. Everybody eats in the same lunch hall, receives the same dental insurance and gets similar amounts in holiday coupons, whether they are production workers or board members. This is a show of respect for the worker as a human being.
Is investing in human capital worthwhile from a financial standpoint as well?
Yes, because that way we reduce the turnover rate and enjoy relatively high employment stability. Thanks to our constant growth in recent years we have never had to dismiss a worker due to reduced orders. We're constantly recruiting new employees and managers from different industries to revitalize our ranks.
In 2006 Assa Abloy, Mul-T-Lock's parent company, conducted a periodic opinion survey among employees in all of the group's companies around the world on attitudes toward the company in their country that employs them and toward the entire firm. The survey included all 200 subsidiary companies around the world, including those operating in Western countries. The survey assessed worker satisfaction, among other things.
Mul-T-Lock came in first place. A second identical survey is currently finishing up and we're eagerly awaiting the results.
How does this policy affect your employee advancement policy?
We prefer to retain our workers for an extended period of time, which means we have to create advancement opportunities for them and ways to develop their career and bring them into management positions. It's not by chance that half of the board members worked their way up through the ranks, and the same applies in the ranks of middle management. An excellent example of this is the three factory managers in Israel, who came to the company years ago as production workers and warehouse workers.
This approach also affects our recruitment processes. From the start of the recruitment process for professional jobs as well as management positions, both low-level and high-level, candidates are assessed not only for their ability to successfully occupy the post they're applying for, but also for their potential to develop and advance at the company. Also, the fact that Mul-T-Lock is not too big an organization and has a flat organizational structure allows the management to gain close familiarity with the employees. This makes it relatively easy to locate able people and promote them.
Despite Mul-T-Lock's relatively high positioning it's still a company that employs a lot of production workers. Do they have advancement opportunities, too?
Obviously the chances of a production worker getting promoted are smaller than that of employees in other company systems, especially in light of the organization's flat structure. Still, if a good production worker wants to get promoted the company will find an opportunity for him. And it might send him to take a course and support his personal development, and we can cite examples of this in the field.
To what extent do your ties with Assa Abloy allow advancement and mobilization of employees to other countries as well?
Recently we expanded our opportunities for promotion to companies under the parent company in other countries as well. You can find job offers at the firm's locations around the world. Although these processes are just getting started, they're growing.
So far several managers from Israel have landed executive positions overseas: the former CEO of Mul-T-Lock, for example, became director of the EMEA [Europe, Middle East and Africa] division at Assa Abloy, while the former deputy CEO got transferred to Italy, where he's managing regional operations. The trend of assigning Israeli managers to Assa Abloy posts, especially outside of Israel, is turning Mul-T-Lock into a more attractive company in the job market in two spheres: among outside job candidates and among employees who we value highly. Every appointment of this type resonates in the organization and helps us keep good managers. This kind of assignment has added value for the organization since Mul-T-Lock acquires another goodwill ambassador within the ranks of parent company management.
Can you cite concrete examples of this type of mobility?
Certainly. I'll present you with two examples that illustrate how this mobility allows us to retain quality employees and keep the know-how and experience we've accumulated.
A talented machine engineer who was transferred to the cylinder factory and felt he had maximized his potential there, showed an interest in transferring to an overseas job. Presumably, if there hadn't been opportunities abroad, that engineer would have quit and taken his valuable professional knowledge with him. Therefore he was offered a post as technical manager at one of Mul-T-Lock's subsidiaries and everybody gained:
Mul-T-Lock retained expert knowledge and its subsidiary got a high-caliber, multitalented person with a deep understanding of the company's products. The employee was given an opportunity to acquire international experience with job security and an opportunity to continue working in a field in which he was already considered a leading professional. His "price" in the job market went up automatically.
Another example: Four years ago an Israeli manager who had worked abroad was recruited as CEO of our US subsidiary. Recently he returned to Israel as a member of the board of Mul-T-Lock. This type of mobility creates a chain reaction: his post abroad has now been taken by a woman who had been the marketing communications manager of the company in Israel and her underling was chosen to replace her.
Presumably this potential mobility is only relevant for relatively high-level employees.
Naturally international mobility is relevant primarily for high-level management and to a certain extent, middle management as well. The reason is that our companies around the world have a local character and have to stay that way. Someone located in Argentina has to know how to speak Spanish and be very familiar with the local market. It's less likely for your average employee in Argentina to work at a subsidiary in England. As such, most of the mobility is from Israel to subsidiaries in other parts of the world – when the need arises and the employee is highly qualified to man the post. On the other hand we try to be as open as possible in our approach to manning posts.
What is the company's salary policy?
Mul-T-Lock's policy when it comes to employee salary levels is two-fold: in relation to the metal industry in which we operate, the aim is for their pay to be above the industry average. In the case of professions in high demand, such as engineers, we're competing with the entire job market, including leading high-tech companies, to attract talented workers, so we aim to set salary levels at least as high as the average for that profession.
We assess what takes place around us in terms of salaries, participate in salary surveys and inquire of our colleagues and suppliers (e.g. placement and consulting companies) regarding salaries. This exposes us to up-to-date information.
What incentive programs does the company offer?
We run a program to improve performances, with the manager of processes improvement in charge. Quantifiable parameters are set annually in accordance with the company's goals. For example, if one year parameters are set regarding a reduction in inventory days and substantial improvement is achieved, the following year goals will be set in another area.
Company management allocates funding for employee incentives. The factory managers divide the incentives in accordance with the goals achieved based on formulas and indexes known in advance. Some of the incentives are for staffs and are handed out to staff members equally, and some are individual, based on performances and excellence at the individual level. The frequency of the incentive bonuses distributions changes according to the type of activity: In the production factories it's monthly, in marketing and sales it's quarterly and for company executives the incentives are annual.
What about production workers' salaries?
The base pay for production workers is slightly above minimum wage, on the average, but it's rare for this to be their pay in practice for three reasons: Professional skill and accumulated experience entitle the employee to additional compensation, overtime hours is a regular occurrence and individual and staff bonuses are handed out every monthly.
Why is overtime such a regular occurrence?
Overtime in production serves both the needs of the company and those of the employees. From the company's perspective, the ability to employ workers overtime allows us to preserve the right level of operating flexibility. Otherwise the costs and the decreases in production would create instability, which could lead to frequent recruitment and dismissals. From the employees' standpoint, overtime hours provide them a regular source of extra income.
The company's organizational-logistical systems support it, of course, and the workers who stay get a dinner out and a ride home when they finish working.
Still, we're aware of the need to keep overtime hours down to a reasonable amount to prevent burnout. Excessive overtime is liable to lead to quitting. This is especially true in the case of young mothers, for whom staying long hours disrupts their family life. As a result today we tend to extend the workday no more than two or three times a week by an average of two and a half hours. That's not so little, but our past experience shows that during periods when overtime hours dropped considerably the workers complained about a decrease in their pay. Here, too, there is a matter of balance while taking work necessities into consideration.